OBJECTIVES: Cow’s milk allergy (CMA) is the main cause of food allergy in infants, resulting in life-threatening events such as anaphylaxis, impairment in growth and quality of life. CMA symptoms are also related to other diseases, making the differential diagnosis crucial for an earlier effective treatment, avoiding waste of resources. Amino acid formula (AAF) is an alternative in treatment of CMA patients, but it can also be used as a diagnostic tool for children with CMA suspicion, shortening the time for diagnosis, which may reduce resources use. Our goal is to estimate the cost-effectiveness of an alternative practice (AP) using AAF as a diagnostic tool for CMA followed by treatment according to current practice, compared to those currently (CP) used in Brazil, under the perspective of the public healthcare system.   METHODS: A decision model was constructed depicting the CMA management, with a time horizon until patients turned three years old, when most of CMAs are resolved. Model inputs were based on literature review and opinions of allergists/gastroenterologists/pediatricians. Exchange rate was 1.00USD = 2.30BRL. Only direct costs were considered, such as formula, tests, allergy treatment, medical visits and hospital admissions. Results were shown as incremental costs/relapses avoided. Deterministic and probabilistic sensitivity analyses were performed.  RESULTS: The CP presented rates of 25.4% and 9.3% of diseases other than CMA after 8 and 12 weeks respectively versus 34% in 2 weeks for AP. With this difference an effective treatment could be established in a shorter time, diminishing the waste of resources. The final analysis showed that the AP using AAF for diagnosis is dominant (USD1,345 and 900.6 non-symptomatic days) compared to CP (USD1,476 and 876.0 non-symptomatic days).  CONCLUSIONS: AP enabled an earlier CMA diagnosis, avoiding waste of resources, allowing the establishment of prompt effective treatments and leading to higher compliance with clinicians’ recommendations.